The Oath

Trust is the foundation of my profession.

I will serve all interests in good faith.
I will compete with honour.
I will pursue my ends with ethical restraint.
I will help create a sustainable future.
I will help create a more just society.
I will speak out against wrongdoing and support others who do the same.
I will accept responsibility for my actions.

In these and all other matters;
My word is my bond.

The Vision


A banking and finance industry that
meets the community’s needs and has its full confidence thereby fulfilling its integral role in society.

Perhaps The Banking and Finance Oath was an initiative developed ahead of it's time. But the date of Monday 4 February 2019 has drawn a very clear line in the sand for financial services in Australia. Dr Simon Longstaff explains why now is the time for individuals working in financial services to take the Oath. 

Banking royal commission: The world of loopholes has ended

By Dr Simon Longstaff 

The final report of the Hayne royal commission is both unsparing and inspired.

Kenneth Hayne casts a wide net in his analysis of what went wrong in Australia's banking and finance industry. However, there is one group on whom he pins ultimate accountability; the boards and senior executives of the entities whom he found to be at fault, "Nothing that is said in this report should be understood as diminishing that responsibility. Everything that is said in this report is to be understood in the light of that one undeniable fact …"

That is the unsparing part of the report.

Kenneth Hayne is inspired in his injunction to all Australian business that it must apply some underlying principles, "These norms of conduct are fundamental precepts. Each is well-established, widely accepted, and easily understood."

  • obey the law;

  • do not mislead or deceive;

  • act fairly;

  • provide services that are fit for purpose;

  • deliver services with reasonable care and skill; and

  • when acting for another, act in the best interests of that other.

A dominant theme in Mr Hayne's final report is that it is time to eliminate the law's own exceptions to these principles – a series of 'loopholes' – often the product of political convenience – that allow the underlying principles to be violated by those with the wit, means and licence to do so.

There is a subtle quality to Mr Hayne's arguments on this point. At no time does he suggest that ethical commitments should be elevated above compliance with the law. Indeed, he is clear that he opposes that approach. However, he makes it clear that the Law must conform with ethics – in the form of 'underlying principle'.

The implications of this for the targets of his harshest criticism – boards and senior executives – are profound. For too long, it has been possible to ease through a loophole and take comfort from the fact that questionable (and profitable) conduct was 'strictly legal'. That approach has cost us all dearly.

The fact that a loophole was available to be exploited does not mean that it should have been. The capacity to exercise ethical restraint (not to do everything that is possible) was always latent within the ranks of boards and senior management.

To be fair, we should acknowledge that boards and senior management have often exercised that capacity. We will never know (and credit will never be given) for the many cases of good judgement that have prevailed. Unfortunately, in the current environment, a multitude of good decisions counts for little when compared to the relatively few, but emblematic, cases of ethical failure – some of which may also have been unlawful.

Ethical failure occurs when core purposes, values and principles are betrayed. On some occasions this is done in a knowing and deliberate manner. More often, the cause is a failure of culture and governance (both intimately linked) that leads an organisation to 'sleep walk' into an ethical 'death pit'.

Recognising this, Commissioner Hayne recommends that:

All financial services entities should, as often as reasonably possible, take proper steps to:
  • assess the entity's culture and its governance

  • identify any problems with that culture and governance

  • deal with those problems, and

  • determine whether the changes it has made have been effective.

In doing so, Hayne supports and extends the approach already adopted by APRA and ASIC by looking beyond 'risk culture' to evaluate the whole.

The Ethics Centre is a pioneer in the development and application of world-class tools for undertaking precisely the kind of evaluation being recommended by Hayne. This approach should not be limited to banking and financial services. It is essential for all organisations – whether in the private or public sectors. The trouble is that boards and senior managers are often deeply reluctant to look into a well-polished mirror that reveals the truth about their organisation. Instead, they look to those who offer a 'magic mirror' that always reflects the comforting myth that you are the 'fairest of them all'. It takes a certain kind of moral courage to ask for the truth. Perhaps Kenneth Hayne has strengthened the sinews of corporate Australia. We will see!

Australia was one of the first countries to develop an ethical framework for banking and finance. The Banking + Finance Oath was created in the aftermath of the global financial crisis – at a time when all seemed to be relatively rosy on the domestic front. The great disappointment was that so few people took up the opportunity to commit to the 'underlying principles' on which the BFO is based. Perhaps too many people saw that reality fell too short of the ideal.

If ever there was a time to make something better, it is now. In the wake of the Hayne royal commission, it is time for the ethical majority, working within banking and finance, to step up. Whatever your role or seniority – it's time to own what is noble in the aims of banking and finance and to give life to its ideals. Embrace underlying principle, measure and achieve alignment, exercise ethical restraint, regain trust. Do so in the expectation of profit and to earn that most elusive of rewards: a good name.
That is the opportunity that lies latent in the recommendations of the Hayne Report.

Dr Simon Longstaff is executive director of The Ethics Centre. 

You can also read the article online in the Australian Financial Review.